Four in ten Canadians believe their financial situation will be better in 12 months’ time – but a similar share would struggle with mortgage and debt payments if interest rates rise significantly.
The survey by Chartered Professional Accountants of Canada (CPA Canada) shows that 11% are pessimistic about their finances, 45% think they will be unchanged a year from now, and 3% don’t know.
"It's welcome news to have a significant number of respondents expecting their financial situation to improve," says Doretta Thompson, director, corporate citizenship, CPA Canada. "But while the vast majority of Canadians expect to be in the same or better financial position next year, there is still lingering anxiety among others about saving for the future and managing current debt. This highlights the importance of financial literacy education, in particular, around retirement saving and debt management."
Debt struggles could be ahead
The study found that 39% said that a significant rise in interest rates would make it challenging to keep up on their mortgage and/or debt payments; and 62% have cut back on day-to-day spending in the past five years.
Canadians are split in terms of how they view their overall personal financial skills with 48% giving themselves a grade of B or higher and 49% grading themselves C or lower, 3% are unsure.
Of the Canadians surveyed, the most substantial personal financial concerns are saving for retirement (20% ) or managing debt (17%).
